On March 30th the Senate Committee on Finance passed out SB 1 as substituted unanimously. It is anticipated the Senate will take up the budget bill on Tuesday, April 6th.
The bill as substituted spends $117.9 billion of general revenue which is currently over the Comptroller’s Biennial Revenue Estimate (BRE) of $112.5 billion. No appropriations from the Economic Stabilization Fund are included for the 2022–23 biennium. The resulting cash
balance of the fund plus the total asset value of investments is estimated to be $11.6 billion at the end of fiscal year 2023.
Spotlight on items in the bill include:
FOUNDATION SCHOOL PROGRAM
- Funding of $53.0 billion in All Funds is included for state aid to school districts and charter schools through the Foundation School Program (FSP). General Revenue Funds for the FSP total $41.1 billion, which represents an increase of $3.8 billion from the 2020–21 biennium.
- Funding for the FSP fully funds current law and includes an estimated $3.1 billion for student enrollment growth and $1.0 billion in additional state aid related to property tax compression required by the Texas Education Code.
- Other Funds for the FSP increased by $325.6 million, attributable to projected increases of $432.4 million increase in recapture payments, $180.4 million from the Property Tax Relief Fund, $348.9 million from the Tax Reduction and Excellence in Education Fund, and offset by a decrease of $636.0 million from the Economic Stabilization Fund related to onetime funding provided to address the impact of Hurricane Harvey.
MEDICAID
- Funding for the 2022–23 biennium includes $72.2 billion in All Funds, including $25.1 billion in General Revenue Funds and $0.1 billion in General Revenue–Dedicated Funds, for the Texas Medicaid program. This amount is a decrease of $2.7 billion in All Funds, including $1.3 billion in General Revenue Funds, from 2020–21 biennial levels.
- Included in these amounts is $67.2 billion in All Funds for Medicaid client services, $1.7 billion in All Funds for programs supported by Medicaid funding, and $3.2 billion in All Funds for administration of the Medicaid program and other programs supported by Medicaid funding. Th e net decrease in Medicaid funding is due to a $3.1 billion All Funds decrease in Medicaid client services off set by a $0.3 billion All Funds increase in administrative funding and a $0.1 billion All Funds increase in other programs supported by Medicaid funding.
- Less favorable federal medical assistance percentages (FMAP) combined with the assumed loss of the 6.2 percentage point increase to FMAP pursuant to the federal Families First Coronavirus Response Act result in a lower proportion of the program being funded with Federal Funds. Th e resulting increase in General Revenue Funds demand is offset partially by a reduction in General Revenue Funds demand due to the overall projected reduction in Medicaid client services. Full funding for anticipated increases in cost due to medical inflation, higher utilization, or increased acuity is not included.
- The 2020–21 biennial amounts for Medicaid assume supplemental funding to complete fiscal year 2021 expenditures.
TRANSPORTATION
- Funding provides $30.2 billion in All Funds for all functions at the Department of Transportation. Funding for the 2022–23 biennium includes $19.4 billion in Other Funds from all State Highway Fund (SHF) revenue sources, which includes the following amounts: an estimated $9.6 billion from traditional SHF tax and fee revenue sources; an estimated $5.1 billion in funding from anticipated state sales tax and motor vehicle sales and rental tax deposits to the SHF (Proposition 7, 2015); an estimated $4.0 billion in funding from oil and natural gas tax-related transfers to the SHF (Proposition 1, 2014); and $0.7 billion from SHF regional toll project and concession fee revenue.
FEDERAL FUNDING
- Texas has been allocated federal funding assistance from the first four major spending bills totaling an estimated $19.1 billion.
This includes: $307.0 million for the Governor’s Emergency Education Relief Fund (GEERF I); $8.0 billion for the
Coronavirus Relief Fund; $5.6 billion in Public Assistance Grants; $1.3 billion in Elementary and Secondary School
Emergency Relief Funds (ESSER I); $828 million in Higher Education Emergency Relief Funds (HEERF I); and
$479.0 million in Centers for Disease Control and Prevention (CDC) Testing Funds, with the remaining $2.6 billion
comprised of various grants to various state agencies and institutions of higher education – during Senate Finance discussions it was pointed out these funds have all been spent. - The two most recently passed bills, the Coronavirus Response and Relief Supplemental Appropriations Act and the
American Rescue Plan Act, will include additional funding to Texas for CDC Testing, Higher Education (HEERF II and
HEERF III), Public Education (ESSER II and ESSER III), the Governor’s Emergency Education Relief Fund (GEERF
II), as well as other areas not yet announced. The Legislative Budget Board staff, in cooperation with other state and
federal agencies will continue to monitor and analyze information and guidance as it becomes available
